VAT

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Am advised this morning, by RYA, that following discussions with HMCE, Section 8(?) is being revised to indicate that copy invoices will be acceptable as proof of VAT payment.

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Which still flies totally in the face of everything JFM has said, and still leaves the VAT issue with the current owner, not the one actually originally responsible.
 
Sorry, don't get shirty, I've written a lot on here in attempt to be helpful (but feel free to put me on ignore if you don't want it) and it's possible innocently to miss a point, you know :-)

I answered your first point but no I didn't answer your follow on point in the same paragraph.

I agree with you on the practical level. If not having a docket means the police will seize your boat then of course having the docket makes sense and has a value in seconhand boat tsansactions. I submit that in the UK that vlaue is illusory as HMRC would never sieze your boat purely becuase you had no VAT invoice. But it could be important elsewhere, eg see Mapis's points above re Italy. My detialed comments on here are all UK law.

By the way, it is perfectly possibly lawfully to have a VAT not paid boat in the Med with a VAT paid invoice, so as to keep the Spanish off your backs. You might even find several posters on here are in that position but let's leave it at that cos it isn't right to indicate who

I'd love to get some more first hand stories on what the officials in the Med do. Speaking purely from personal experience, I have personally been stopped twice by the French douanes at sea while captianing a non VAT paid boat without a VAT invoice, and had no problem. Once in 2006, once in 2008. They did basic checks that the non VAT-paidness was ok, and then left happily. They even said, no kidding, "Your papers are very good sir, thank you for making our checks so easy, I wish more were like you". One of my clients had a superyacht stopped with the wrong papers and they didn't want VAT on the boat hull (fortunately) they just wanted tax on the last detax fuel fill, which was about €5k. That boat was impounded in Antibes 3 days. Not physically chained, just told not to move (2006). One other forumite on here was stopped at sea/in a port in a non VAT paid boat in France in the last 2 years and had similar ish papers to mine, and was fine too. They are the only first hand reports I have. Everything else is 3rd hand in a pub, just like the scremingering on UK HMRC is. If you ever get any first hand accounts please do post them

And my "stopped twice only" isn't for want of trying! I have sailed Itlaian, Med France, N France, Ireland and UK waters for many years, mediterranean most weekends for the last few years, including last weekend and this one coming, and I have never been asked about VAT except for the two occasions above. Nor have i ever paid VAT on a med boat, nor paid VAT on any servicing, fuel, spare parts, etc (apart from fuel in Itlay, a few times). So if there were a problem, you'd think I'd have seen it, wouldn't you? (Before anyone asks, no I'm not explaining the detials of all this on open forum).

I dunno much about spain but planning a cruise there (non VAT paid!) in 2009, so will report back!
 
Yup, good point Petem. As a practical matter, getting a doc that is signed off by good VAT folks in say UK, Ireland, France, Spain and Italy would ver expensive. Beyond the budget of MBY. I dunno about the RYA
 
Yup. Twould be helpful if HMRC/RYA could say why VAT invoices are needed at all, instead of dealing the with copy-vs-original question.

Section 8 of what, by the way?
 
Yep, that would be good. It's another solution that RYA/MBY could put to HMRC.

The certif, to be useful abroad, might need to say something like

"We HMRC have carried out enquiries under [citation] in respect of boat XYZ HIN Number XXX Type XXX. We are satisfied that (a) no UK VAT is due in respect of this vessel and (b) if any VAT were due it would be due to UK HMRC and not to the tax authority of any other Member State"

..though they'd struggle to give (a). It might have to say "...due from Mr/Ms X as current owner in respect of this vessel..."
 
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No. There's no EU law that directs the UK or any other member state to enact a law saying that Mr B is liable for Mr A's taxes, VAT or otherwise, nor that Mr B's assets may be seized to collect Mr A's taxes. All the Directives are online starting with the treaty of Rome, and all are text-searchable. Find the clause if you think I'm wrong. I can't give you a citation to prove the absence of a legal provision

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So why do we hear stories of boats being impounded in (say)France due to owners being unable to prove to customs that the vessel is VAT paid? Surely the retort should be "well you'd better go find the first owner then and speak to him"?

Clearly that doesn't work though.

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Because France has (maybe, I don't know) enacted such a law. you need to read what i said carefully, cos this is complex. I said there is no UK law on impounding, nor any EU directive telling member states to enact such a law*. Accordingly, the UK has no such law. That doesn't mean the French aren't free to pass such a law, if they choose.

*Remeber, and sorry if telling you how to suck eggs, directives are not laws per se. They are legally enforceable instructions to member states to enact local laws to give effect to the rules in the directive. So, each country passes its own law to implement the directive, kinda reinventing that same wheel 20+ times over...!
 
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That'll cost them about £50k

[/ QUOTE ] And that'll the point that ybw and RYA pretended they hadn't read this post. /forums/images/graemlins/smile.gif
 
Thank you for a very comprehensive response. It more or less confirmed what I thought.

I was once offered a new boat to be delivered in the CI, VAT free, rented to me for a period, and then sold to me for the new price less the rent paid and VAT to be paid on import at the "second-hand" price.

I also had a Sunseeker which was VAT paid in Spain at 11 months old on the "second-hand" price. All legal and documented.

I have considered Med leasing (probably Italian) as it seemed a good wheeze for using the VAT saving to cover the leasing charges and keeping the cash in the bank earning interest.

Finally, I too, have been boarded by French and Italian police and have never been asked about VAT status.

Thanks again.

John
 
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Am advised this morning, by RYA, that following discussions with HMCE, Section 8(?) is being revised to indicate that copy invoices will be acceptable as proof of VAT payment.

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Unfortunately that in itself is cobblers, no VAT inspector would take a single sales invoice as evidence of any payment whatsoever, only when it is part of a VAT account with evidence of the net payment made AND any periods under which a credit note or other adjustment AND their ability to inspect/adjust such VAT liability has expired would it be remotely set in stone from the VAT mans point of view as payment actually made. Best is that a VAT invoice (copy or not) is evidence that well a VAT invoice was raised at that time, the rest is assumption....

I'm with jfm.
 
It may be cobblers but it is what the legal officer of the RYA E Mailed me this morning. "HMRC are re drafting Notice 8 and am told it will refer to copy invoices being acceptable as proof of VAT payment." Is that cobblers?
 
well, Vat inspectors arent looking into VAT liability on subsequent boat owners, presumably for the reason JFM has articulated. They might be much more demanding on the original sales dealer and his VAT returns, yes, sure.
The RYA did have some survey on their web page about all these boats being impounded. OK, not every event necessarily appears in the survey, but there were very very few instances that they could find.
If the Tax office do make a token change that, for them,copies would/might suffice, it would surely help clear the mess and misunderstanding, so I d be all for it.
 
I guess they mean para 6.3 of Notice 8, here

That's a pretty messy bit of drafting.

The very first sentence says you mustn't use a yacht in EU if not VAT paid. Well that's not how the law is written. The VAT liability doesn't turn on "use". If you import a vessel into EU you must account for VAT on the importation, regardless of whether you use it. Furthermore if you are caught redhanded using a vessel that you imported without paying VAT, you are not assessed to VAT on the use per se, nor by the member state in which you are caught using it. The vat liabiity is owed to the state into which you first imported it. Jeeze, it would be really helpful if this was written better, cos you can easily see how that language suggests that you could be stopped in say Holland and assessed to Dutch VAT on "using" your UK-based boat if you can't prove its VAT status. Surely RYA/HMRC/Powers that be could make clear that if VAT is owed it is a matter for the home country, not the country you're currently cruising in.

At the end of 6.3 it says "If you are buying from a business or an individual in the EU with no liability to account for VAT, you should obtain evidence that VAT, if it had ever been due in the EU, has been accounted for". Aaaargh! What we'd like to know, Mr Draftsman, is what are the consequences of not having the evidence? If my solicitor advises me "JFM you must do this" I tell him to get lost and tell me what are the consequences if I don't. Often the answer is "Well, er, nothing really" or "Well there is technically a 50p stamp duty". I'd never tell someone "You must do this" without explaining, in summary terms at least, the reason why. I submit that in the UK at least the consequences of not having the evidence mentioned in that quote are zero, so far as HMRC is concerned
 
jfm

I think this is one of the most interesting threads I have ever read on the Forum. Two thoughts arise;

1) Congratulations, and
2) How do we get someone ( lets say the RYA ) to deal with this in a definative manner?
 
Tee hee, thanks. Ref 2, I dunno. I dont know anybody @ RYA. I think this is an area of extreme dullness but actually an area that needs to be got right cos squillions of ordinary boater folks (OP for starters) have their perfectly nice 2nd hand boat sales/purchases derailed by this whole thing. And the incorrect parts are now so often repeated (see Jrb1978's comments after your post) that they are thought by most to be true.

So how to do it? I think Hugo could take it up. It's of interest to his readers. He could lead the project and ask RYA to own the process of getting a legal analysis agreed with HMRC and up on the RYA/MBY website. Will cost money, take 6 months maybe, but tis perfectly do-able. I dunno if Hugo is reading this thread. Whoever sorts this out will be doing boat owners a huge service. I'm happy to help (not for money - tis ok I have plenty of other buisiness!) and am even qualified, though too busy to "own" the project.
 
Even more muddling is the wording, which came with the HMRC VAT receipt I received in May 08 when I paid VAT on a new boat, which says....(my underlining)

"The enclosed receipt is proof of VAT payment in the UK. You should <u>retain it for six years</u> "

Should you be required to use the receipt to facilitate a refund of VAT paid in another EC state, it is strongly recommended that you retain a copy for your own records"
 
That musta been written by a numpty boat dealer? Or was it written by HMRC when you paid importation VAT or summink? I'd like to see you try, having paid UK VAT, "facilitate a refund of VAT paid in another EC state"! The French would be delighted about that, eh, where the UK govt collects VAT and they refund it! :-)

Kinda illustrates the degree of misunderstnading of VAT though. Even among HMRC. Especially among HMRC :-)
 
I once sent an invoice for a truck I sold. The bloke did'nt pay the vat amount, so I didn't pay the VAT. So the invoice dont mean a thing.

By the way, VAT folk said, as my accountants were so good, I must have paid the VAT, they just could not find where. /forums/images/graemlins/grin.gif
 
Your right. The receipt I quoted came from HM Rev and Customs from their National Unit for Personal Transport. I'd bought a new build Swedish boat and had to notify HMRC when she got delivered to the UK. Reckon that bit of paper is worth hanging onto for a bit longer than the 6 years they suggest!
 
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